Benefits of C-PACER

Learn below how C-PACER financing benefits not only property owners, but also local governments, contractors, and various members of the banking industry.

C-PACER for Local Governments

C-PACER boosts the economy and creates jobs by funneling private investment into C-PACER enabled communities. The contributions of C-PACER to the economy measure in the billions for private investment and tens of thousands for jobs created (PACENation). Local governments desire to create greater prosperity in their jurisdictions but are hampered by lack of funds and inability to attract new business and younger demographics. Many architectural and development trends point to the high marketability of “green buildings,” and studies indicate that a younger workforce prefers to live and work in spaces that are friendly to the environment. Finally, C-PACER helps local governments meet federally- or state-mandated efficiency and clean energy standards as well as accomplish local energy efficiency goals while requiring no government funding as the financing is offered by private capital providers.

C-PACER for Property Owners

At its core, C-PACER is a reliable source of affordable financing for property owners to make money- and energy-saving improvements to their buildings. Property owners can procure and install efficient, triple-glazed windows for their storefronts that reduce heat transmission, high-efficiency HVAC models, interrelated systems that synergize temperature control and lighting, and much more. C-PACER is growing in the United States real estate industry because it is an effective tool for defraying upfront cash expenses and allowing businesses and developers to enjoy utility savings without the burden of utilizing existing credit capacity. Fixed interest rates are competitively set by the market, and C-PACER typically requires no down payment. The assessment is attached to the property, so no personal or corporate guarantee is typically required by capital providers that fund projects.

C-PACE for Contractors

C-PACER finances 100% of all hard and soft costs associated with eligible energy improvement projects, including a contractor’s time and resources to design and install those improvements. For contractors, C-PACER is a way to pitch deeper energy retrofits that, due to cost, would otherwise not be implemented and effectively sell green building design features that would typically be value-engineered out of a development project.

C-PACE for Capital Providers

Capital providers see C-PACER as a highly reliable, long-term investment. Requisite capital for C-PACER projects routinely runs hundreds of thousands to millions of dollars. Through the seniority of the property assessment, capital providers are secured by the value of the real estate and are repaid through a known repayment stream.

C-PACE for Mortgage Lenders

For existing buildings, C-PACER projects typically provide numerous benefits to existing mortgage holders. C-PACER projects typically help to boost net operating income through funding improvements that dramatically reduce a building’s operating costs while charging a low annual repayment that is frequently less than the savings. Increased cash flow from C-PACER projects can improve debt service coverage ratios for mortgage holders and boost asset value. For the acquisition and renovation of vacant buildings, C-PACER financing typically offers lower interest rates than preferred equity or mezzanine debt with longer maturities, helping projects to fill gaps in the capital stack and achieve a lower overall blended cost of capital. Finally, mortgage holders are relatively protected with C-PACER as C-PACER assessments are non-accelerating in the event of a payment default or delinquency. Only past-due assessments are enforced through the C-PACER lien, while the balance of assessments remains with the property.